In 2019, Apple launched the Apple Card in partnership with Goldman Sachs. This card offers attractive benefits to the users, such as 2% cashback on all spends when paid using Apple Card with Apple Pay, 3% cashback on all Apple store purchases, alongside benefits like no annual fees, foreign transaction fees, or late fees. However, according to a new report, Apple is said to be looking to end its partnership with Goldman Sachs, putting the future of Apple Card into jeopardy.

What has been said?

According to a report from The Wall Street Journal, Apple is looking to exit from its partnership with Goldman Sachs in the next 12 to 15 months. Apple and Goldman Sachs will reportedly dissolve their entire consumer partnership, which not only includes Apple Card, but the newly launched Apple Savings account service as well.

For those unfamiliar, even though Apple offers the discounts and benefits for Apple Card via the Wallet app, it is Goldman Sachs who is running the back-end operations. The end of this partnership will likely force Apple to find a new issuer for the card, though it’s unclear if such arrangements are in place yet.

Even though Apple denies the report and, in a statement to CNBC, has said that it will “continue to innovate” and “deliver the best tools and services” for Apple Card users, the report appears to hold more truth than not. The news of Goldman Sachs looking for a way out of the deal with Apple has been circulating for some time.

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Why is the partnership ending?

Numerous reports have indicated that both Apple and Goldman Sachs have been exploring options to exit this partnership. Apple was reportedly unhappy with the customer service of Goldman Sachs, with many users reporting several issues with the Apple Savings Account and Apple Card. Users reported difficulties withdrawing funds from their savings accounts, while Apple Card users faced problems such as unprocessed refunds and multiple rejection of transactions.

This situation led to the U.S. Consumer Financial Protection Bureau launching an investigation into Goldman Sachs, causing tension between the two companies. On the other hand, executives from Goldman Sachs blamed Apple for the regulatory scrutiny. However, a primary reason why Goldman Sachs is looking for a way out is primarily financial.

Reports indicate that the company incurred a massive loss of $1.2 billion in just nine months. As stated in a report from The Wall Street Journal, some Goldman Sachs executives regretted their involvement in the consumer-lending business, with one executive reportedly expressing, “We should have never done this f—ing thing.”

What does it mean for Apple Card users?

So, it’s clear that this situation was somewhat predictable. But, does the end of the partnership between Apple and Goldman Sachs mean for Apple Card users? Well, for now, the future of Apple Card and Apple Card Savings account remains unclear. As stated above, Apple does not have a replacement lined up yet.

There were discussions about Apple potentially teaming up with American Express, but that would have meant the Apple Card running on the Amex network. However, this isn’t feasible due to an existing agreement with the Mastercard network, which is in place until 2026. Another potential issuer, Synchrony Financial, has been mentioned as a candidate to take over the Apple Card, according to The Wall Street Journal, but the status of that also remains unknown.

With the partnership now likely to end in the coming year or so, Apple will begin exploring potential candidates to take over. We expect Apple to finalize a deal fairly quickly. However, the company doesn’t have a backup plan in place at the moment and that could force Apple to discontinue the Apple Card or Apple Savings Account services — though it is very unlikely to happen.